Shamal Az-Zour Al-Oula Power and Water Company made its market debut on Boursa Kuwait’s Premier Market on 16 August 2020. NBK Capital is the listing advisor. Courtesy Shamal Az-Zour Al-Oula.
Shamal Az-Zour Al-Oula Power and Water Company made its market debut on Boursa Kuwait’s Premier Market on 16 August 2020. NBK Capital is the listing advisor. Courtesy Shamal Az-Zour Al-Oula.
Shamal Az-Zour Al-Oula Power and Water Company made its market debut on Boursa Kuwait’s Premier Market on 16 August 2020. NBK Capital is the listing advisor. Courtesy Shamal Az-Zour Al-Oula.
Shamal Az-Zour Al-Oula Power and Water Company made its market debut on Boursa Kuwait’s Premier Market on 16 August 2020. NBK Capital is the listing advisor. Courtesy Shamal Az-Zour Al-Oula.

Business

Shamal Az-Zour Al-Oula gets nod for Boursa Kuwait trading debut on August 16

The listing marks the first power generation and water desalination company to be listed in Kuwait

Deena Kamel
Deena Kamel

August 08, 2020

  • English
  • Arabic

Shamal Az-Zour Al-Oula Power and Water Company said it received regulatory approval for its listing debut on Boursa Kuwait's premier market on August 16.

The company is the first power generation and water desalination firm and the first private-public partnership project to be listed in Kuwait, it said in a statement on Saturday. NBK Capital served as the company's listing adviser.

"The listing adds diversification to the [equities] market that will attract local, regional and international investors, it is a testament to the strength of the private sector and its ability to take the initiative for economic development and increasing non-oil revenues," Husam Abdullah Al Roumi, chairman of Shamal Az-Zour Al-Oula, said.

The listing follows after the Kuwait Authority for Partnership Projects (KAPP)'s public offering of its stake in Shamal Az-Zour Al-Oula to Kuwaiti citizens last year.

The distribution of 50 per cent of the company's total shares to Kuwaitis during the last quarter of 2019 was oversubscribed by 1.27 times and attracted about 127,000 investors.

The remaining 50 per cent of shares are owned by various public and private sector entities. Some 40 per cent is held by Azour North One Holding Company, owned by a consortium comprising Engie, Sumitomo and AH Al Sagar & Brothers. The Kuwait Investment Authority and the Public Institution for Social Security each hold a five per cent stake.

“Shamal Az-Zour Al-Oula represents a unique opportunity for citizens to invest in a privately-operated infrastructure project," NBK Capital chief executive Faisal Abdullatif Al Hamad said. "The company operates in the resilient utilities sector, and benefits from a stable revenue outlook …  as a result of a long-term contract with Kuwait’s Ministry of Electricity and Water.”

The company operates the Az-Zour North One power and water plant, which began commercial operations in November 2016. The plant currently supplies about 10 per cent of Kuwait’s installed power capacity and 20 per cent of the country's water desalination capacity.

Power and water produced by the company are entirely supplied to the national power and water grid operated by the Kuwait Ministry of Electricity and Water under a 40-year long-term Energy Conversion and Water Purchase Agreement.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

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Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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